Allan von Mehren, chief analyst at Danske Bank, notes that the GBP weakened against EUR yesterday, on a day full of headwinds.

“Softer UK PMIs, compression of Italian sovereign spreads and marginally negative but not too surprising comments from Boris Johnson combined to send the GBP lower. If indeed we are about to see a weakening of domestic data in UK combined with euro spread compression, the EUR/GBP could move towards 0.9., although this is not our main scenario. Nonetheless, forecasters have been surprised by strong UK data and a turn towards weaker growth indicators could fuel some short-term headwind for the GBP, even if Brexit news is neutral.”